Sheryl Dennis Wright | Sin taxes – necessary step to relieve the public health burden

The Government unveiled a significant shift in tax policy, one which the country has not seen in over a decade. New levies have been introduced on sugar-sweetened beverages (SSBs), cigarettes, and alcoholic drinks as part of the 2026/27 fiscal measures.

The move comes amid fiscal pressures post-Hurricane Melissa, and the pressing need to close the revenue gap. Consequentially, this will address the burden of non-communicable diseases (NCDs) on the health sector.

As tax increases on everyday consumables such as sodas are likely to invoke public ire, many welcome the potential health benefits. Taxation on unhealthy commodities like tobacco, alcohol, and SSBs is a World Health Organization (WHO) “best buy” public health strategy. Considering the rationale and the potential implications of these changes, what is evident is a deliberate effort to protect people’s health while maintaining fiscal prudence.

Understanding NCD burden

The treatment of NCDs carries high direct and indirect costs, and impose major burdens on health systems, the educational landscape and households. Diseases like hypertension, diabetes, heart disease and cancers, result in significant productivity losses, early labour force exits, absenteeism, learning loss and premature mortality.

According to the WHO, NCDs disproportionately affect people in low- and middle-income countries, which accounts for three quarters of global NCD deaths (32 million). Notably, the Caribbean has the highest rate of NCD mortality in the Americas, including the highest premature mortality rates due to cardiovascular diseases (CVD).

Data from the Case for Investment in Prevention and Control of NCDs in Jamaica, showed that in Jamaica, 78 per cent of deaths (i.e. nearly 4 out of 5 deaths) are caused by NCDs; and that of all NCD deaths, 30 per cent occurred prematurely (between 30 and 70 years of age). The Investment case, which showed that over a 15-year period (2017-2032) the economic benefits (J$77.1 billion) will significantly outweigh the costs (J$36.7 billion) of implementing the selected policies, analysed that over the stated 15-year period:

• Tobacco control interventions, have the highest return on investment (ROI), in that, for every dollar invested, Jamaica can expect a minimum J$5.3 in return;

• For every dollar spent on diabetes intervention, Jamaica can expect a minimum of J$2.1 in return

• In terms of CVD, for every dollar spent on intervention, a minimum ROI of J$1.9 can be expected

• For alcohol policy interventions, Jamaica can expect a minimum J$1.86 in return.

NAVIGATING THE DELICATE BALANCE

Undoubtedly, the most talked-about new tax is the Special Consumption Tax (SCT) on SSBs, including sodas and flavoured drinks. Given the proposed $0.02 per millilitre, this levy adds approximately $6 to a 300 ml drink, $12 to a 600 ml bottle, and $40 to a two-litre beverage. Consequently, this will significantly revenue for the government coffers.

Industry proponents and others argue that these increases will not result in changed behaviour, and that the price increases may not immediately lead to lower consumption. However, international experience and public health evidence suggest otherwise: when sugar taxes raise the price of high-calorie drinks, consumption tends to fall, especially among heavy users and youth.

These shifts can lead to reductions in obesity, diabetes risk, and long-term health costs. This position is supported by trends in other countries with similar levies, and also shows that SSB taxes have dramatically reduced purchases among lower-income households, the very groups that often bears a disproportionate burden of diet-related diseases.

CIGARETTES

The government’s increases to tobacco, though it appears to be least talked about at the moment, reflects a significant health promoting measure. This is against the background that every year, more than 7 million people die from tobacco use, including an estimated 1.6 million non-smokers who are exposed to second-hand smoke. As highlighted from the investment case, tobacco control interventions will secure the highest return on investments. In fact, this move is in keeping with Jamaica’s treaty obligations under the WHO Framework Convention on Tobacco Control and complements the current tobacco control measures.

The SCT on cigarettes will rise from $17 to $20 per stick, raising roughly $1.1 billion. It is not uncommon for tobacco industry allies to seek to link tax increase measures to illicit trade. However, taxation will not, by itself result in an increase in illicit trade. On the contrary, evidence shows that non-tax factors including weak or limited governance and ineffective customs safeguards, are often strong determinants of illicit trade.

ALCOHOL

In highlighting that no form of alcohol consumption is risk-free, and that even low levels of alcohol consumption carry some risks and can cause harm, the WHO has reported that worldwide, 2.6 million deaths were attributable to alcohol consumption in 2019, of which two million were among men and 0.6 million among women.

The recently announced measures see alcohol taxes being bumped up, with the SCT on pure alcohol increasing from $1,230 to $1,400 per litre. While some may view this as merely a fiscal move, we know that alcohol misuse contributes to a wide range of social and health harms – from liver disease to road traffic fatalities and family violence – and raising prices is a globally recognised strategy for reducing excessive drinking.

WAY FORWARD

Jamaica’s new tax measures on SSBs, cigarettes, and alcohol are practical measures for improving public health and restoring fiscal stability in the wake of natural disasters and economic strain.

Over time, the increase in taxation impacting demand and limiting access, will result in healthier lifestyles, with fewer diseases linked to poor diet, smoking, and excessive alcohol consumption. If implemented appropriately as a part of a comprehensive range of strategies to influence healthy choices, coupled with measures to facilitate social and economic support, these taxes can represent a win for both the nation’s coffers and the well-being of its citizens.

Instead of grappling with health expenditures and costs to treat with hospitalization related to NCDs, revenues can be directed toward sensitization and health education, preventive care, and making healthier foods more affordable- turning what is often framed as a “sin tax” into a public wellness investment.

Sheryl Dennis Wright is an attorney-at-law and global health law expert. Send feedback to admin@sdwconsultingco.com